EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 21, 1996

.1007

[Translation]

The Chairman: I would like to call the meeting to order for the study of Bill C-32, and Act to amend the Copyright Act.

[English]

I open the session regarding the study of Bill C-32, an amendment to the Copyright Act.

I'd like to welcome the Writers' Union of Canada, represented by Ms Margaret Atwood, chair of the copyright committee; Ms Penny Dickens, executive director; and Ms Marian Hebb, legal counsel.

Permit me to extend a special welcome to Margaret Atwood, one of our most remarkable Canadians. We are very honoured by your presence here.

You may proceed; the floor is yours.

[Translation]

Ms Margaret Atwood (Chair, Copyright Committee, Writers' Union of Canada; League of Canadian Poets): Good morning, ladies and gentlemen.

[English]

Hello, everyone. It's a pleasure to be here today with you. I am presenting our brief from the Writers' Union of Canada and the League of Canadian Poets concerning copyright.

First of all, I would like to thank you for hearing us today and in particular for rearranging your schedule to accommodate mine.

To have a flourishing literature, a country must have a strong Copyright Act. George Bernard Shaw once commented that judges did not recognize copyright as an exploitable property until those of them who kept canaries discovered that birds cannot sing unless they are fed. Having time to write comes down to having enough money to feed yourself. It is too often forgotten that intellectual property is property and that taking it without permission is theft.

Writing is not an easy way to pay the rent. I have been one of the fortunate few. Statistics Canada tells us that in 1994 the average income of a writer in this country from their writing was a little over $15,000. That means a great many of them earn less.

Bill C-32 is largely about money, and its main effect on most writers will be that they will have less money than they would otherwise have.

It is only recently that writers have been able to receive money from certain uses, such as photocopying, for which they previously received nothing because there was no practical way to collect the small sums involved.

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Now we have collective societies: CANCOPY in English Canada and Union des écrivaines et écrivains québécois. Although the sums they collect for individual writers are small, they are significant to the recipients and they reinforce the principle of property ownership. When someone puts a quarter into a photocopier to make a copy of an author's work, it is only fair that a few pennies of that quarter should find their way to the author, who is the owner of the intellectual property.

Collective societies make it possible to administer rights and collect money in instances where it is virtually impossible for an author to do so for himself or herself. In 1988 a previous government passed legislation to facilitate collective administration of copyright. Now Bill C-32 has introduced exceptions that will take away much of that benefit.

I would like to address particularly the exception that extends the concept of fair dealing to the copying of entire articles in libraries. Even if narrowly interpreted to allow only one article to be copied by or for one person at a time, cumulatively this provision will allow the making of many copies of a single article with no payment to the author.

We do not regard this as fair or reasonable, whether the material copied is an article that was published in the past 12 months or in 1986; whether it is poetry, drama, fiction or non-fiction; and whether the copying is done by a student, a teacher, a librarian or a library user.

Where there are collective societies, it is not necessary to legislate exceptions to provide access to the works of authors. Authors want users to have easy access to their works. This is why authors voluntarily join collective societies. Legislated exceptions force writers to subsidize the library and education sectors directly in a way not required of other taxpayers. This is unfair.

Reproducing intellectual property without permission from its owner amounts to theft, and I do not feel my government should legalize theft. Expressed more charitably, legislated exceptions are an expropriation of intellectual property without any compensation. We call on you to eliminate the exceptions from Bill C-32.

Another major concern is the ubiquitous self-serve photocopier found in schools and libraries. We do not consider it fair or reasonable for these institutions to be able to slough off responsibility for supervising photocopiers located under their roof. Bill C-32 removes their liability in respect of copying on equipment they make accessible to their students and members of the public. Rampant photocopying of copyright material will continue and there will be no licensing mechanism available to users who might be disinclined to infringe copyright if offered an easy alternative.

We submit there should be no immunity such as has been proposed unless the institution has a licence from a collective society that covers copying on self-serve machines. Otherwise you may be sure that in most instances authors will receive no compensation for such copying.

My next point is about the new electronic technology, which we as writers welcome. We also fear it, being mindful that it has taken about 20 years for copyright owners to develop means whereby they can control and benefit from photocopying. Electronic media now confront us with an even more difficult problem. Most of the exceptions introduced in Bill C-32 are likely to apply to copies made electronically, although this is not the government's declared intention.

The government has said it will deal with information highway issues later, in phase three of copyright revision. We know from experience that in the meantime the exceptions will be interpreted broadly by many users. Schools and education ministries will be able to transmit copyright material over the Internet for distance education students and examination candidates. Libraries will transmit documents electronically to their patrons and to other libraries without a licence in each case.

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As writers we are concerned both about the loss of control over our own property once it is in electronic format and about our loss of revenue from copying. Libraries charge when they provide documents. Writers get nothing from this.

My next point is again about money, but also about the Canadian publishing industry and dumping. I sometimes see the American edition of one of my books on sale illegally in Canada. Whenever this happens, my Canadian publisher loses significant sales, I lose royalties and the government loses taxes. An author usually receives a much-reduced royalty on the sales of the American edition that is illegally exported to Canada, and sometimes no royalty at all, because the books published in the United States are frequently being dumped in Canada at remainder prices on which no royalty is payable.

I therefore want to stress to you the importance of the parallel importation sections of Bill C-32 to writers and their publishers in Canada, which we support. Without the distribution right, we believe it would be increasingly difficult for Canadian publishers to survive. Some would not survive at all. Certainly fewer books by Canadian authors would be published by publishers in Canada.

As well, it would become more advantageous for best-selling Canadian authors to find a single publisher to supply the entire North American market. This is more likely to be a publisher located in the United States. To lose best-selling authors will further weaken Canadian publishers. Young Canadian writers will find it increasingly difficult to get published in Canada and even more difficult to have a first book published outside Canada. The result would be that fewer Canadian stories would be told.

However, although we applaud the distribution right, we must sound a note of caution. Bill C-32 gives libraries and governments exceptions from importation restrictions, broader exceptions than those that once existed. We oppose these exceptions except to the extent that they are further amended to restrict such importation to single copies prior to book publication in Canada.

My next major point is partly about money and partly about an author's prerogative to decide what he or she wants to have published. A writer's legacy to his or her family is the copyright and the works created during his or her lifetime. A writer is often able to leave little else to his or her heirs. By shortening the period of protection for works that remain unpublished at the time of an author's death, Bill C-32 reduces the value of this legacy. But there are other issues at stake as well.

Under our current copyright legislation, when an author dies, his or her unpublished works remain protected as long as they are unpublished and for 50 years after they are published. An author relies on his or her executor to make important choices about what and when to publish. Bill C-32 says that copyright and unpublished material will expire 50 years after a living author's death, at the same time as copyright expires in the author's published works.

A likely result will be that authors will destroy some material to make certain it will never be published instead of relying on the discretion of their executors in particular circumstances, whether 5 or 75 years after the author has died. The principle that an author or the author's heirs should have the right to decide whether to publish unpublished work is fundamental.

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Authors and others, among them politicians, write letters and diaries, often not intended for publication. For instance, Maud dies, leaving behind a diary containing candid comments about friends and relatives. When Maud has been dead for just over 50 years, her diary can be published without fear of a libel suit, because those in it are now also dead.

Her heirs approach a Canadian publisher, who declines to publish. It's too risky without copyright protection. Another publisher could simply duplicate the printed pages. So Maud's heirs approach a British publisher, who is more inclined to publish than the Canadian competition, because her diary is protected for 20 years longer in the United Kingdom.

At a time when the European Community is extending the basic period of copyright to 70 years following the end of the year in which the author dies, why does the Government of Canada want to reduce our protection for unpublished works to less than 70 years after death? Smart Canadian authors and their heirs will seek first or simultaneous publication in the United Kingdom in order to have protection for a longer period of time, at least in some parts of the world outside Canada. Canada will lose the revenue.

We submit to you that Canada should now extend the term of copyright in all published works to 70 years following the author's death. At the very least, Canada should not shorten protections for unpublished works to less than the basic term of copyright in the countries of the European Union. This change curtailing protection for posthumously published works affects international commerce as well as individual authors, and its implications have not been adequately considered. Any change should be be left to phase three of copyright revision.

Finally, we wish to make a point that we overlooked in our formal brief to your committee. We further submit that the amended fair dealing clause should be altered to make it clear that ``news summary'' refers to use by the media in a newspaper or news program and will not be open to the interpretation that it applies to clipping services, which are being licensed.

In conclusion, I want to emphasis that writers are small business people and our copyrights are often our only real assets. Exceptions to copyright are an expropriation of our property against our will. If copyrights were cars, this would be car theft.

Although most of us are persons of comparatively low income, we are the creators whose work underpins a multimillion-dollar publishing industry. I'm sure you will agree with me that we as writers play a crucial role in the society in which we live and work.

To survive, however, we need the support of strong copyright legislation. This is why we are against exceptions. If we fail to persuade you that exceptions are unnecessary, at the very least we urge you to make them applicable only where a work is not available under licence from a collective society.

We have made a number of other detailed comments on Bill C-32, some of a technical nature. If you have not already done so, we hope you will take time to read our full submission.

Together with the union's executive director, Penny Dickens, and legal counsel, Marian Hebb, I would now be pleased to answer any questions you may have. Thank you.

The Chairman: Thank you, Ms Atwood.

[Translation]

Mr. Leroux.

Mr. Leroux (Richmond - Wolfe): Thank you for your presentation, Ms Atwood. Ms Hebb, you have appeared before this committee on a few occasions. Good morning, Ms Dickens.

Today, we are concluding our hearings which have enabled us to hear 65 different groups. To date, we have received about 190 briefs.

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The question raised by phase II of the Copyright Bill is a fundamental one. For whom is this bill intended? For whose benefit is the Act being amended?

When I listen to the witnesses and look at the whole history of the Copyright Act since 1925-1926, I am obliged to conclude that the bill, as drafted, makes this question more fundamental than ever.

If we want to achieve the goal sought by the bill, that is a balance between the copyright holder and the user, we must look at the way the bill has been drafted and to what degree such a balance, which takes into account the rights of all parties concerned, has been attained.

When we hear the testimony, including yours, because you have proposed amendments regarding exceptions as a whole, we have the impression that the bill slightly distorts the copyright, particularly as regards the exceptions.

We have wondered from the beginning what would be the impact of the bill, if it were to be adopted as currently drafted, and I would like to discuss that point with you, Ms Atwood.

What is the impact of the message being sent by the bill to such important areas as education? The bill allows an important sector of our society to be somewhat sheltered from the requirement to speak with those people who create works. This sector can say: ``I don't have to talk with collective societies because the Act states that I am an exception.''

As we know very well, a large amount of educational work has to be done to ensure recognition of copyright. An author has the right to be the owner of his or her work. He also has the right to allow or refuse his work to be used.

This exception seems to us essentially negative. It is sending a message to people allowing them to abdicate their responsibility to speak and negotiate with others.

Also, all the mechanisms developed in such a short time, particularly collective societies and the role of the Copyright Board, have been reduced to such a degree that the position of many groups, such as collective societies, has been weakened in terms of recognition and their ability to negotiate.

The briefs and work done by many collective societies and many representatives seem to us to be an important message to the government, namely that substantive amendments are needed.

The Chairman: If I may interrupt, but time is going on. You must have questions.

Mr. Leroux: I understand, but I would first like to establish the basis for our discussion of the substance of this bill, which is of fundamental importance. I don't want to discuss just the form, but also the substance. That is why, when Ms Atwood...

The Chairman: Mr. Leroux, this is fundamental for our colleagues also. You know that we don't have much time.

Mr. Leroux: Exactly.

The Chairman: Therefore, please ask your questions.

Mr. Leroux: Are you going to add the time that you've taken from me, Mr. Chairman?

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You are working on proposed amendments. Would you agree that the bill, in its current form, would make the future difficult for copyright holders and collective societies? They will have difficulty in negotiating and ensuring that they are respected and that their rights are recognized.

[English]

Ms Penny Dickens (Executive Director, Writers' Union of Canada): Yes, we would agree with that. It's important to achieve a balance in the bill, but you have to remember that on one side there are a few thousand creators and artists and on the other side there are millions of users. The balance therefore has to be on the side of the artist; otherwise they will be swamped.

[Translation]

Mr. Leroux: Some groups which appeared before us also pointed out that in the bill there seems to be problems of recognition and accessibility for collective societies and authors. As we know, collective societies are not established everywhere.

We heard some groups which, in our view, were right to feel worried since they were in specific situations.

Have you considered those situations even though, as we know, there are already exceptions in the agreement negotiated by collective societies? Do you think that there are some groups which were right to make copyright holders aware of such exceptions?

[English]

Ms Dickens: Even though you say the collective societies haven't reached some people yet, they will reach them. We do not believe there is any reason for exceptions at all. The mechanism is there; let it work.

[Translation]

The Chairman: One last question, Mr. Leroux.

Mr. Leroux: You seem to suggest that exceptions could apply only where there is no collective society. Is that in fact the case? Have I correctly understood what you were saying?

[English]

Ms Dickens: We would rather have no exceptions, but if we cannot have no exceptions, we think the exceptions should be inapplicable where there is a collective and the work is under the collective.

[Translation]

The Chairman: Mr. Abbott.

[English]

Mr. Abbott (Kootenay East): Thank you.

I'd like to read something from another group, which has a slightly contrary point of view to yours, and get your comments:

...copyrights have never been treated like other property rights because there is a strong public interest in adequate access to works. That is why a copyright lasts for only fifty years beyond the life of the author, while property right in a piece of land or chattel can be passed on in perpetuity. ...

If ``intellectual property'' isn't accessible - because it's administratively too difficult or too costly to access, the collective knowledge of society will decline. Intellectual property builds on other intellectual property, and that is the way that knowledge and culture in our society develops. Therefore, while we fully agree with the creators that it is essential to protect creators' copyrights in an information-based society (the incentive to create must always be preserved through the availability of fair remuneration), it is equally important that users are able to have access to creators' works on reasonable terms.

... It does not do justice to a delicate system of creator and user rights that has developed and must continue to develop to label all exceptions as ``expropriations'' or ``theft''.

Ms Atwood: Expropriations or theft when you pay for them. You can get a book out of the library or buy a book in a bookstore with no problem. We have these copying collectives. It's not limiting access any more than it's limiting access to toothpaste. You go into the drugstore, get your tube of toothpaste and pay your $1.50.

Mr. Abbott: There are two elements to the issue of intellectual property. One is the moral, which is that if someone takes it illegally, that is theft. On the other side of the coin, I think what we're really talking about here, with due respect, are dollars and cents.

In your judgment, would it be right and proper to have within the legislation criminal sanctions in addition to civil sanctions? In other words, because we are talking about dollars here, should we not just be talking about civil damages?

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Ms Atwood: Isn't that what we are talking about?

Ms Marian Hebb (Legal Counsel, Writers' Union of Canada): The Writers' Union believes there should be criminal sanctions. There has been some discussion here before about whether or not they're always appropriate.

In some instances it's very appropriate for the rights holders to take civil action, and perhaps that applies more to the collectives, who are in a better position to do so. But when you're talking about individual creators, sometimes you do have individuals who are unable to act civilly, and if the state chooses to use its discretion at that point to assist these persons, that is important.

I do not believe and the union does not believe that criminal sanctions should be removed from the Copyright Act.

Mr. Abbott: Okay.

In conclusion, relative to your issue of the writer's legacy - and I do respect that - one of the difficulties is when we move from ordinary, common English and particularly word-crafting, such as you do so well, to legal words. Legal words take on a totally different picture from word-crafting or story-telling.

Is it rational and reasonable to expect that we would be able to craft words, in a legal sense, in this act in such a way as to allow people who are concerned about research - and now I'm thinking about genealogists and other people doing that kind of thing...? Should we be able to craft words in such a way as to make the differentiation between words put together by an author, such as you, for the purpose of entertainment or information and words on a piece of paper that will add to our bank of knowledge of our genealogy and our history?

Is it really reasonable that we should be able to come up with wording in a legal text that would permit us to have that differentiation? Can we do what you want to do while at the same time giving genealogists access to the information they want?

Ms Atwood: I don't quite see the problem. What we're talking about is the right to reproduce. If a genealogist goes to a library or goes into the archives, they can usually forage and rummage away to their heart's content, unless the material has been put aside by the person who has died so it cannot be opened for 80 years or 50 years. Lots of people do that in their estates.

What we're talking about is the right to publish, not the right to research. There is a difference.

Mr. Abbott: What about reproducing? Really what I'm keying on here is the right to reproduce, because this is a concern to genealogists and people trying to do family histories and those kinds of things.

Ms Atwood: What would they be interested in - birth certificates or what?

Mr. Abbott: Birth certificates, land titles and perhaps even diaries such as you were talking about.

Ms Atwood: Well, diaries such as we are talking about I still feel would be under the control of the literary executors - especially diaries.

Ms Hebb: If I could add a little bit to that, I have read some of the transcripts of the concerns expressed by the archivists, and indeed they referred to Ms Atwood in their discussion.

Writers are obviously both users and owners and share some of the same concerns, but we do not see it as a problem. We would be quite prepared to support the archivists - and perhaps this is for phase three of copyright - in some sort of provision that would allow the Copyright Board to deal with the situation where there is a unlocatable copyright owner. Where the author had died and you couldn't track down the heirs, one could go to the Copyright Board and they would grant a licence, just as they do now for published material.

Access should not be a problem, because of what Ms Atwood has said in terms of the research, and publication should not be a problem, because we do have a Copyright Board.

Ms Atwood: But as an author, I can tell you that if I see that time limit being reduced, my first impulse is to burn the papers. Burn them all - now.

Mr. Abbott: The difficulty I'm having is that the diary of an author like you would probably be considered totally different from the diary of a person like me.

Ms Atwood: I think yours would be much juicier.

Some hon. members: Oh, oh!

The Chairman: Go for it, Jim.

Mr. Abbott: No more questions.

Some hon. members: Oh, oh!

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Mr. Peric (Cambridge): Thank you, Mr. Chairman.

Ms Atwood, in your brief, as well as in your presentation today, you pointed out that you are opposed to the single-copy exception in proposed section 30.2. You mention that writers would lose revenue. Can you explain to us how much income is generated from the reproduction of a single copy at the present time?

Ms Atwood: Not much, but it's one plus one plus one plus one plus one plus one plus one plus one. You could say to your classroom, if you were a teacher, that each student could go make a single copy. That's 30 copies. Multiply that by a thousand schools. It's cumulative. A single copy, no, but a single copy is just one in a series.

Mr. Peric: Then let me ask you this differently. How much revenue would your association generate by eliminating the single-copy exception?

Ms Atwood: A single car theft isn't much either. It's the accumulation.

Mr. Peric: But do you have any rough estimates?

Ms Atwood: It depends on everybody's work being copied.

Ms Hebb: There are no rough estimates, because in fact people have been doing this with the photocopier for some time, and this has been draining revenue away particularly from periodicals and freelance writers of articles.

Actually, I believe that if you look in CANCOPY's submission, there were some figures given. There was a survey done - I'm sure CANCOPY would supply this to you - of what copying has been done in the libraries. There have been several surveys. It is actually quite a large amount of money. I can't remember the figure you were given the other day.

Mr. Peric: But how large? Are we talking about millions of dollars or hundreds of thousands of dollars?

Ms Hebb: It was several hundred thousand dollars. I think that was the figure you were given the other day. I can't remember what it was specifically, but it was mentioned in CANCOPY's presentation.

Ms Atwood: The people who are hardest hit are freelance journalists. They're not going to take my novel in and copy it. That's too much work. So it's the journalists, the people who write single articles and things like that, who lose out. They're often freelancers.

Ms Hebb: It includes a number of members of the Writers' Union as well, because many people who write books also write articles.

I would also point out to you that at the moment it is illegal to do this. It is against our Copyright Act to copy the whole of an article. So as soon as people are told that it's now okay to copy the whole of an article, what was maybe a loss of $500,000 or $250,000 will be multiplied, and it will become a much larger drain of revenue from writers.

Ms Phinney (Hamilton Mountain): Say you were to make a single copy of an unpublished work while doing research yourself for the purpose of research and private study. Say you took it home to work on it. Would you be in favour of making an exception for somebody's who's making a single copy of an unpublished work?

The reason I'm asking this is that I have copies from where this exception is allowed, such as in the United Kingdom, the United States and Australia. I'm just wondering if you would be in favour of that.

Ms Hebb: No, I would not be in favour of that, because I think there's a danger attached to it. I think that most writers who give material to archives do provide for this. Most of them would allow that for certain material, but perhaps not everything.

If there was no agreement that covered it when it was in the archives.... Most agreements for deposits in archives do cover this. It's routinely covered.

But for material that an archive has acquired in some other way, not by a direct gift from the author, there could be an application to the Copyright Board that would be very pro forma and routine. I think it could be done by pushing a piece of paper from the archivist to the Copyright Board.

Ms Phinney: Do you think it would make any problem in world studies for people who are doing research on a subject if Canada's rules are different from those of other countries?

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Ms Hebb: No, none whatsoever.

I think you'll also find that with some of those exceptions in the other countries, there are a lot of conditions attached. There certainly are a lot of conditions about whether more than one person can make a copy. I think these exceptions that have been presented to you are a lot more complicated than what you have been advised by some of the people presenting them.

But I don't think what we have is a problem. I think it can be very easily dealt with in a Canadian way.

Ms Atwood: This happens to me all the time. I have unpublished material in the archives. If people want to do research on it, they go to the archives. The library phones me to ask whether they can make a copy. I say sure. And if I were dead, my executor would say sure. Or maybe I would; I can come back.

Ms Phinney: There are more and more seniors going back to school and doing research. They're in good health, and they want to do this type of thing. They might not want to sit for five, six or seven hours. They may not be physically able to sit for many hours in some dark corner of the library working on this. It would be more convenient for them to take it home and be able to look at this one page at -

Ms Atwood: And they can. Provisions are there for people to do this.

Ms Hebb: Lots of writers actually do have it in their archival deposits that certain parts of their materials can be copied. When you start copying the whole of someone's novel or unpublished manuscript, you can understand that the author might be nervous about this material being out in the world. It has never been published, and that's dangerous.

Ms Phinney: On page 2 of your brief you ask for the definition of perceptual disability to be reconsidered. Could you expand on that? Do you have a suggestion for a definition?

Ms Hebb: I think we were uncertain of what you meant this to cover. What were the disabilities that it would cover?

Presumably this is only for people who have a visual handicap. We're a bit concerned that it could be extended to people who have perhaps a mental handicap. Publishers do publish material that's specifically for, say, slow readers. I don't think that a book for a slow reader should fall under this exception. I think it's very broadly drafted.

Ms Phinney: Do you want to include the hearing impaired?

Ms Hebb: I don't know what exception is proposed for them. As for closed captions on television, we don't have any particular view on that. I think if you're going to have an exception for one, then maybe it's fair for the other.

We don't think it's necessary to have these exceptions for anybody, because they are now covered by licensing, in fact.

Ms Phinney: Thank you.

The Chairman: I'll allow one last question to each party.

[Translation]

Mr. Leroux.

Mr. Leroux: Not so very long ago, you had a meeting in Toronto during which certain concerns were expressed about inter-library loans, borrowing of books, etc.

Do you think there will be amendments? How do you see the future of this bill?

[English]

Ms Dickens: We have amendments to this bill. This bill, I believe, causes writers to subsidize the education and library sectors to a greater degree than that of other taxpayers. We don't see why that's necessary when there is the mechanism, the collectives and access.

Access used to be the concern. That's been dealt with through the collectives. Now it's money. If the writers don't receive money from the use of their work, they will not be able to write. That's the bottom line. Copyright legislation is supposed to assist the copyright holders.

Ms Hebb: I think it will be a disaster for writers in this country if this bill passes unamended.

The Chairman: Mr. Abbott, you have the last question.

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Mr. Abbott: I'm curious about your position relative to there being no exceptions as long as there is a collective like CANCOPY. But in the event that we wanted to put in exceptions so that would apply only to people who were not covered by CANCOPY, CANCOPY would be the first group to say that its group or repertoire was not complete. It just strikes me that your suggestion would create even further confusion.

Ms Dickens: We consider that authors voluntarily join CANCOPY for their own protection. If somebody chooses to be out there on their own without protection, and there are exceptions in the bill, then that is something they choose to do.

But the vast majority of writers choose to join CANCOPY. They do it on a voluntary basis because they want their copyright to be protected and they want to be paid for the use of their work. This is why the collective.... It took a long time.

Mr. Abbott: I'm just worried about two-tier legislation. That's what I'm concerned about.

Ms Dickens: Then the alternative is to remove the exceptions, which we will be very happy to see.

The Chairman: Mr. Bélanger.

Mr. Bélanger (Ottawa - Vanier): Thank you, Mr. Chairman.

I take it that the system has evolved positively in recent years in the sense that collectives have come into their own and have created the mechanism to collect royalties, whereas before, it was almost impossible, according to your own statement.

How would your association react to the notion of mandatory membership in collectives to simplify this? If we were to get away from exceptions, then maybe the flip side would have to be mandatory membership. I just wanted to know what kind of reaction you would have to that.

Ms Atwood: We still believe in free will. We're old-fashioned. I think it should be somebody's choice as to whether or not they want to join any association.

I think they need the information to say that this is what happens if you do, and this is what happens if you don't. It has to be your choice as to a yes or no. In fact, this whole thing is about choice. What we are really saying is that it should be our choice as to whether somebody uses our work or not without our getting paid.

People in schools often write me and ask for this or that. I say sure. Writers are quite generous people. They share their time. They share all kinds of things. They just don't want it legislated that they have to do it.

That would be my position about mandatorily belonging to any kind of association.

Mr. Bélanger: Thank you, Mr. Chairman.

Ms Atwood: But that's personal.

Ms Hebb: I think that would be endorsed by the union.

Ms Atwood: Good.

Ms Hebb: I'm sure it would be.

Mr. Bélanger: I may or may not agree with this, and that's neither here nor there, but the notion that everything is a free choice is something with which I would think most taxpayers would disagree.

Ms Atwood: No, I don't think everything is a free choice, but I think some things are and should remain so.

Mr. Bélanger: Fair enough.

Ms Hebb: Don't forget that writers want to be read; that's why they write. The idea that writers would withhold their work is nonsense. We don't think that compulsory mechanisms are necessary.

Mr. Bélanger: But if there is to be no withholding.... You've given three examples whereby you had requests to which you said sure.

Ms Atwood: Yes, but I've had other requests to which I said no.

Mr. Bélanger: Fair enough.

The Chairman: Ms Atwood, Ms Hebb, Ms Dickens, we really appreciate your presence here. I think you have made your position very clear to us. We especially appreciate that you have taken the time and trouble, Ms Atwood. Thank you for coming.

Ms Atwood: Thank you very much for listening to us. Merci.

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The Chairman: Could the meeting come to order, please?

[Translation]

We are pleased to welcome representatives from the Department of Canadian Heritage and from Industry Canada who have worked on Bill C-32.

Before you make your presentations, I would like to clarify one point. The Departmental officials are here to answer technical questions. They are not here to answer policy-related questions. That is not their role.

[English]

The point is that I think the officials are here to clarify the technical points of the legislation and to answer any questions that we want to ask. They're not here to reflect on the policy or the politics of the government. I think I should make that quite clear.

We welcome Mr. Victor Rabinovitch, who is the assistant deputy minister for cultural development and heritage; Ms Susan Katz, director of cultural industries;

[Translation]

Mr. René Bouchard, Director, Copyright Policy and Economic Planning; Mr. Jeff Richstone, lawyer; Mr. David Tobin, Acting Assistant Deputy Minister, Industry and Science Policy;Ms Danielle Bouvet, Director, Intellectual Property, Department of Industry; and Ms Elizabeth Britt, lawyer.

[English]

Mr. Rabinovitch, the floor is yours.

Mr. Victor Rabinovitch (Assistant Deputy Minister, Cultural Development and Heritage, Department of Canadian Heritage): Thank you, Mr. Chairman. On behalf of my colleagues, let me express our pleasure in being with you at this final session - as we understand it - for hearing from witnesses. In initiating our portion of testimony and in responding to questions, I wonder if I could make a brief statement.

The Chairman: Please do.

Mr. Rabinovitch: When Minister Copps tabled Bill C-32 on behalf of the government, and when she appeared before this committee, she emphasized that the goal of the legislation was to establish a balance between the rights of creators and the needs of users. She and others have used the expression ``a fair and balanced approached'' when describing the legislation.

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This committee has now received over 170 briefs and has heard from more than 60 witnesses. On any particular issue that you might choose to name, strong opinions have been expressed on both sides - and in some cases more than two sides - of any of the issues. The hearings themselves have demonstrated the inordinately difficult task facing any government that sets about to reform or amend copyright legislation. To illustrate, let me mention just two elements in the bill. The first one is exceptions, and the second one is performers' and producers' rights.

With regard to exceptions, the government took the policy decision that for reasons of the public interest, certain institutions - specifically educational institutions, non-profit libraries, archives, and museums - should be able to use copyrighted works without authorization or payment, but under very limited circumstances. As officials, we have tried in the drafting of this bill to circumscribe the exceptions, as per the instructions of our two ministers. The purpose was to enable those institutions to fulfil their roles at public institutions. It has been suggested by some witnesses that the drafting of these exceptions in the bill would lead to an expropriation of authors' rights. I want to stress for the committee - and I hope this is helpful in your further consideration of the bill - that this was certainly not the intention of the government.

With regard to performers' and producers' rights in musical works, our challenge was to balance the rights of performers and producers with the needs of radio broadcasters. The structure of the performers' and producers' right in Bill C-32 has been designed to provide a framework within which the Copyright Board can take into account the relevant factors affecting radio broadcasters and the musical industry, thereby ensuring an orderly introduction of the rights. The tariff, of course, will itself be established by the Copyright Board.

I think the committee has heard some witnesses say that the performers' and producers' rights will result in only a very modest return to the music industry. You have heard other witnesses say that the radio broadcasting industry should not be required to pay more in total for music than what is being paid now. Once again, in drafting the bill, we try to find the right balance between two points of view.

Authors of musical works - the composers and the lyricists - have been following the debate before this committee with considerable interest. Specifically, they have asked if they will be obliged to pay for performers' and producers' rights. In effect, will the net return to them be reduced?

I want to stress that the government's policy intention was clear. First, in creating performers' and producers' rights, the government intends to be creating two rights. They are separate from and independent from authors' rights. Second, it was not intended that current copyright tariffs would be reduced by reason of the introduction of performers' and producers' rights.

Let me turn to a practical policy issue. One consideration that often arises in the discussion of copyright is the fact that sometimes the rights of creators simply cannot, as a practical matter, be enforced simply and directly. Private copying of musical works is a perfect illustration of the problem. Bill C-32 attempts to rectify the situation in which there is widespread infringement of copyright, but there is no easy, practical way to enforce this copyright. We are not able, nor would we ever want to enforce copyright by ensuring widespread access to people's private homes, for example. The private copying regime in Bill C-32 tries to recognize the reality by providing for a remuneration right for authors, for performers and for producers of sound recordings.

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As I move to conclude, Mr. Chairman, I'd only note that creators are impatient for the government to get moving on copyright issues that are related to the information highway. As officials, we discuss this often amongst ourselves, and we're equally anxious to be able to move ahead and to provide coherent advise to the government. But first, clearly Parliament must act on phase two of copyright reform.

The list of amendments that witnesses have put before the committee is a long one. In the end it will be for the members of the committee to arrive at decisions on what will be reported back to Parliament. As you said in your opening comment, Mr. Chairman, we're here today to provide technical and legal advice, and I hope we're helpful to your deliberations in this way.

I have one final comment that is more personal in nature. Obviously no piece of legislation can achieve perfection, especially not a piece of legislation that deals with copyright. We all look forward with happiness to the fact that in five years' time the act that will be adopted by Parliament will be subjected to review and many of us will be at it again.

Thank you very much.

The Chairman: Are you ready for questions?

[Translation]

Mr. Leroux: Thank you, Mr. Rabinovitch. I said at the beginning of the meeting that there were so many lawyers here that I had the impression of being at the trial of O.J. Simpson.

You mentioned, and correctly so, all the briefs you received. I am told there were about 190. We also heard from 65 groups. A number of people around this table were present throughout those hearings. Everyone listened very carefully to the presentations and the concerns expressed to us.

As you mentioned, the purpose of this bill is to ensure a balance between copyright holders and users. But you added a dimension which seems to me clear, namely the concern of the government to protect, through legislation, certain organizations, structures or agencies, such as those in the area of education.

As regards the mechanisms, such as collective societies and the Copyright Board, there have been some recent developments, including an effort to establish a certain practice and accumulate expertise.

The various groups of witnesses have shown that, for all practical purposes, recognition of copyright and mechanisms for free negotiation are jeopardized as a result of this Bill. They are jeopardized because of the government's concern to protect certain people and institutions. It is as if the bill were telling the people affected, that we could not trust collective societies and that the work of certain institutions, such as those in the area of education, must be facilitated.

Is there anything to suggest to you that collective societies and the representatives of copyright holders are unable to respect the fundamental role of the institutions which you wish to protect through the exceptions in this bill.

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[English]

Mr. Rabinovitch: Mr. Chairman, obviously some of the questions and some of the comments will deal more directly with the type of technical information and technical precision that my colleagues here will be able to bring.

[Translation]

The details and information they provide will help the members of the committee in their deliberations following the appearance of the witnesses.

[English]

Still, there is a basic question of policy that the member has raised. The question deals with whether or not exceptions as such - the concept of exceptions - are necessary ones in Canadian copyright law.

When the policy was developed some years ago to establish and to recognize the establishment of collectives for the negotiation of rights, it was understood by the government that certain public institutions and certain public, non-profit activities would be subjected to a regime of exceptions. This was part of the understanding at that time. In developing the bill that has been brought forward, we have tried to develop that framework in a manner that is practical and in a manner that is realistic. We are not trying to extend the exceptions beyond what they are supposed to do. We are not trying to weaken the collectives in their negotiations or their representation before the Copyright Board. We are trying to maintain the balance that was promised several years ago when this regime was first established. That's the approach.

[Translation]

Mr. Leroux: Mr. Rabinovitch, I can follow your argument very clearly. However, one group which you just mentioned, the Canadian National Institute for the Blind, told the committee that the agreement it has already concluded is working, that it has never had any negotiating problems and that it is satisfied with the way things are going.

However, you just said that exceptions had to be included in the bill for certain groups, including that particular one. That is not what we heard. That group told us that relations with the collective society were good, and that with the licence they had everything they needed to operate and could continue to negotiate.

Therefore, you are raising a case, which, in my view, does not have to be included in the bill. That is what I'm trying to understand. If the purpose of the exceptions is to achieve a balance, you have really gone beyond that. It might be thought that collective societies are able to enforce copyright themselves. But, from my reading of the bill, I don't have the impression that it is recognized. On the contrary, the bill contradicts what the Canadian National Institute for the Blind told us, namely that things were going well.

Mr. Rabinovitch, we see here the very difference between the policy side and technical side of things. I realize that with this bill, the focus was placed on the need of Industry Canada because as regards the Department of Canadian Heritage, they are seeking to achieve a balance.

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I am not suggesting that the interests are divergent. It seems to me that everyone wants to promote the interest of the user, but we have to look at what will happen with this bill. The point you raised does not seem to correspond to that objective.

[English]

Mr. Rabinovitch: Mr. Chairman, clearly this is a question of judgment, and it's a question of judgment that can only be solved by the elected representatives in the end.

We have to be aware that many groups have asked for these exceptions. Groups representing disabled people have come forward - not only before this committee but in the media - and have very publicly asked for those exceptions. In the negotiations of rights that have taken place in recent years, part of the expectation has been that there would be a regime of exceptions. This undoubtedly has helped to colour and to create the context for the discussions on the use of rights and the payment of rights until now.

In effect, what the government is now doing is coming forward and fulfilling certain expectations. But in addition to fulfilling those expectations, the government is trying to respond positively and practically, but in a limited and not broad manner, to those requests that have come forward from particular user groups who do expect a regime of exceptions for public interest reasons. But I stress, Mr. Chairman, that the exceptions are intended to be strictly defined, strictly understood, and not merely broad and all-encompassing. That's the attempt.

[Translation]

Mr. Leroux: Mr. Rabinovitch, the committee has done a job which I would describe as thorough. I believe that my colleagues and all the staff have done a high quality piece of work here.

If we disregard the technical questions that could be put to you - many specialists witnesses have enlightened us on various clauses of the bill - can we expect that in the very near future you yourself will be able to give us some indications regarding possible amendments? Do you, or do you not, have a mandate or will the committee have to manage on its own and table the necessary amendments? That is what I'd like to know.

Mr. Rabinovitch: The members of the committee will have to discuss their needs and the work they will have to do. We, government officials have followed closely the discussions taking place here and will report to our ministers who will then give us directives on major policy issues. I hope that will be done very soon.

How should the committee proceed? That is up to the committee to decide, but I can assure you that we have followed your deliberations very closely. You are not an orphan who is being abandoned.

Mr. Leroux: What you have just said is important. We have to draw up a time frame and react. We cannot remain in a vacuum. I do not feel that I am an orphan. However, I do feel that the committee may ask you to speed up your work if possible. Your answer was quite positive in that you are currently working to obtain direction from the government. That is what I understood.

Mr. Rabinovitch: Mr. Chairman, I can assure you that, like you, we are working almost day and night and often during weekends also. We take this very seriously.

Mr. Leroux: We can come back to that later. Thank you.

.1125

[English]

The Chairman: Mr. Abbott, 15 minutes.

Mr. Abbott: We've touched on one issue here. That is that obviously the minister, as intelligent as she may be, does not work in a vacuum, nor does her parliamentary secretary Mr. Arseneault. I'm sure they are taking direction from you; therefore, what you have to say to us today will give us.... You take directions from -

Mr. Arseneault (Restigouche - Chaleur): It's reversed.

An hon. member: No, they take direction from her.

Mr. Abbott: Okay, I said the opposite.

Mr. Arseneault: We work as a team, actually.

Mr. Abbott: That was a Freudian slip. In reality -

Mr. Arseneault: In reality, it's a two-way street. We're a team.

Mr. Abbott: In reality, it's a two-way street. They're a team and would therefore.... Oh, come on.

Some hon. members: Oh, oh!

Mr. Abbott: The point I'm driving at is this. Clearly, the department has a tremendous amount of background knowledge, information and history as to where the department would like to go. It is then up to the department, notwithstanding the protestation of the Liberals on the other side, to convince the politicians of that direction. In some instances the politicians will resist, and so on and so forth, which leads me to my question.

With respect to the time shifting and ephemeral exemption, the fact that those have not been included in this legislation, and the fact that they have been on the legislative agenda for forty years - according to one of the interested parties - it was promised in phase two, when copyright reform was announced under another regime in 1988, that of the Conservatives. During consultations on the first draft of the bill in connection with phase two - what we're working on right now - rights holders participated in negotiations in 1993 with respect to the scope of the time-shifting exemption.

Would you be at liberty to tell me if it was the recommendation of the heritage department to the politicians to forget it, that the department wasn't going to do it? Or was it the politicians who said they didn't want any part of it and weren't going to touch it?

Mr. Rabinovitch: I'm told by my colleagues that this is the sort of question I'm supposed to take, Mr. Chairman.

First, Mr. Chairman, just as a matter of propriety between a public servant and a minister, it would not be proper for us to ever say that we gave this type of advice but the minister didn't take it, or alternatively, that we never gave that advice but this is what the minister has done. It's not the way we work, and I'm sure you're really aware of that.

The question of an ephemeral exception has certainly been raised by a number of groups that have appeared before you. Clearly, in terms of what might have been said by a previous government, whether on this particular subject or on any other in the form of a possible piece of legislation, that type of statement rests with that previous government. Whatever the subject matter, whether it be an ephemeral exception or a matter of labour law or a matter of industrial law or international relations, governments govern on the basis of their mandates and on the basis of who has been elected. I think we have to be very clear that for Bill C-32 it is the government of the day that instructs on what would be in the bill, and it is the government of the day that will eventually choose how to respond to different suggestions that have been made in the parliamentary process.

As officials, we have listened very carefully to the various presentations. We have been studying them and we will be continuing to study them very much in a matter of the next few days. At some point, we will be receiving direction for what we should be preparing from our respective ministers, who of course work together as a team on this. Beyond that, I don't think I could say very much on the ephemeral proposal.

Mr. Abbott: If your department was offering me advice, if I was acting in that capacity, where would you come from? Would you suggest that it should be included?

The Chairman: Excuse me, but in all fairness I think you're putting the officials in a position where.... This is the kind of thing they will be discussing with the ministers, but they will be taking directions from them. Whether their view was this or not, they're not going to make that decision. I don't think we should put them on the spot to make a decision that is not theirs to make.

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Mr. Abbott: Let me change to a totally different topic, then: tape levy.

Under the tape levy, one of the concerns has been where the tape levy will be applied. I have suggested that if the tape levy is applied at the point of importation, it will add just a phenomenal amount to the retail value of the tape when it's sold. If a decision is made to go ahead with the tape levy, would the department see regulations that would see the tape levy applied at the point of importation or at the point of retail sale?

Mr. Rabinovitch: I'm going to ask Ms Katz to take that question.

Ms Susan Katz (Director General, Cultural Industries, Department of Canadian Heritage): In the way in which the regime has been proposed, the levy would be applied at the level of the importer or the manufacturer. I think an argument for imposing the levy at that level of the distribution system is that to a very great extent it simplifies the management of the private copying regime itself.

Mr. Abbott: Is the department aware of what this will do to the retail price point of the product?

Ms Katz: The Copyright Board will determine the level of the levy. They will conduct hearings and hear from witnesses on the extent of the damages suffered by copyright owners as a result of private copying. They would be considering other factors as well, and they would make their determination on that basis. I don't think we would be in a position here today to say what the value of the levy would be and therefore what the implications would be for the price of blank audio recording media.

Mr. Abbott: I understand that, but is the department aware that whatever the levy is, whether it's 20¢ or $1 - it doesn't make any difference - it will eventually end up in the hands of whoever it's intended to get to, this supposed $12 million that we're talking about? It will get there whether it's applied at the entry level to Canada at importation or whether it's applied at the retail level. Has the department taken that into account?

The position that I have taken is that if we use the figure of 37¢ - that's the number that has been bandied around - and we add it to a 50¢ tape, we now have an 87¢ tape. It is not going to be sold at retail at 99¢. By the time it goes from the importer to the wholesaler to the retailer - or through any other way by which it gets to the point of sale - that 50¢ tape will have a mark-up from 50¢ to 99¢. If you apply a 37¢ charge, that will be taken as a cost of goods sold at the 50¢ level, so now you have 87¢. With the applicable mark-ups on the 87¢, that will mean that instead of a 99¢ tape, you now have a $1.79 tape.

So would you agree that perhaps there is then the incentive to start to see a grey market of tapes coming across the border illegally?

Ms Katz: The 37¢ figure that has been used in discussions on private copying is really an average of the levies that apply in countries that have designed their regime similar to the way in which the bill proposes that the Canadian regime be designed. I think the figure of 37¢ is a difficult one for us to use simply because the Copyright Board will make the determination as to what they think an appropriate level for the tariff would be. They would also be wanting to consider, in addition to damages suffered by rights holders, any other factors that might affect the effectiveness of the regime itself.

Mr. Abbot: I'm sorry, but we don't seem to be connecting here. I understand about the 37¢, but what I'm asking is whether or not the department has taken into account...? Let's not worry about whether it's 37¢ or $1 or 2¢. Let's worry about where it's going to be levied. Has the department taken into account that this will be taken as a cost of goods sold by the importer, and that this then inflated number, from the 50¢ tape, all of the mark-ups, will be applied on whatever the levy may be?

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Mr. Rabinovitch: I think a number of points are being raised in this question. One is the more technical one Mrs. Katz has already referred to, that the amount of the levy will be determined by the Copyright Board, and various factors will be considered by that board when the levy is set.

There is a second factor, that of market competition. What portion of a cost gets passed on at the retail level clearly will depend on competitive factors. I have no doubt there will be retailers who will be able to absorb some portion of the cost more than others will. There will be retailers who will continue to use tapes as leaders to attract consumers for other goods in their stores. Clearly the market system will function. That's one of the advantages of our retailing system in Canada.

But there is a third element, and I think it's a very important one. I suspect that...and I'm afraid I wasn't here for the entire presentation of the witnesses who were here before us.

The third element is that the payment for the copyright, the payment for the droits d'auteur, is in our law a cost of doing business. It is not fair, and the government is trying to create a regime of fairness. It is not fair to assume that artists, producers and creators should not be recompensed for their works simply because up until now they have not been adequately compensated for their works.

So the tape regime has been devised to ensure that there be some remuneration paid to artists, to creators and to producers for the works that are right now being reproduced without payment.

Mr. Abbott: But should that remuneration be taken from, for example, churches that put out sermons and recordings of their Sunday services...have legitimate blank use of that tape? Should those shut-ins and should those churches and should the educational institutions that use tapes for legitimate purpose, having nothing whatsoever to do with illegal copying, be subjected to that cost?

[Translation]

Mr. Rabinovitch: Mr. Bouchard will answer that question.

Mr. René Bouchard (Director, Copyright Policy and Economic Planning, Department of Canadian Heritage): I would just like to add one comment with respect to the levy and where it should be applied.

You talked about the base point, and the levy would be collected when items are imported or manufactured rather than at the retail level. One of the reasons for that is to ensure better monitoring of the system. If it was applied at the retail level, the number of controls would have to be increased because there are far more retailers selling cassettes than there are importers and manufacturers selling cassettes to retailers.

One way of ensuring that the system is effective and meets the objectives set for it is to impose the levy at the import level.

As regards the second question, in recent years the department has carried out a number of studies which have shown beyond the shadow of a doubt that the vast majority of cassettes, if not all, are used for the purpose of copying musical products.

Some pressure groups have demonstrated to you that the target clientele of cassette manufacturing companies were those people who use them to copy musical recordings.

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[English]

The Chairman: We can come back to you later on, Mr. Abbott.

[Translation]

Mr. Bélanger.

[English]

Mr. Bélanger: Mr. Rabinovitch, I'm glad we spelled your name correctly this time. We learn in the committee.

You said at the start of your opening statement that there was an understanding that the next phase would be to strive for a balance between the copyrights and the needs of the user. You didn't make a distinction between during which regime this understanding was arrived at. Yet in a further question you put that difference, when the question dealt with whether or not there was an understanding, or whether or not ephemeral exceptions or transfer-of-medium exceptions...if there was an understanding vis-à-vis those exceptions whenever phase one was being done.

Without imputing any motives to anyone, was there at that time, in any way, shape or form, an understanding that exceptions dealing with ephemeral and transfer-of-medium matters would be dealt with?

Mr. Rabinovitch: I know the issue was discussed. I cannot tell you that there was an undertaking. I cannot tell you that there was any form of specifically saying this is how it will be done. In the relatively short period of time I've been involved with this file - it's going on two years, so it isn't as short as I am, but it's certainly getting on - the number of times in which different items that are within the bill have been referred to as, ``Well, that was settled a long time ago'', and then one party or another came forward and said, no, they never agreed that this was settled....

I want to be very specific about this. There were some items in this bill where some of the very effective interest groups that are now lobbying were said to have agreed to certain things and subsequently have said they have not agreed to.

So it's a complex bill. The subject matter is complex. There have been, on many occasions, many discussions. There have been attempts, on many occasions, to arrive at compromises, deals and balances. In the end, what really counts is what's put forward by the government, and ultimately what's put forward by this committee.

Mr. Bélanger: Fair enough.

[Translation]

One of the most enjoyable moments of the last two months...

[English]

Mr. Rabinovitch: Mr. Chairman, Mrs. Katz has additional information on that.

Ms Katz: I would just like to make a couple of points of clarification with regard to ephemeral and transfer of medium.

The question of transfer of medium was for us certainly a new issue. It was put before us as an issue that should be dealt with in Bill C-32 only very recently, in fact after the bill had been tabled. It's quite a complex and difficult issue. To our knowledge, no other country has an exception for transfer of medium and for the creation of new permanent reproductions through the transfer of medium.

So this is quite a complicated issue, and one that had not been discussed in the pre-tabling deliberations. I thought I would make the clarification between the two.

[Translation]

Mr. Bélanger: I was saying that one of the most enjoyable moments of the last two months, for me, was when the representatives of the Educational Media Producers and Distributors Association of Canada, who produce educational material, appeared before us.

They represent an industry which is largely made up of companies such as CTV or CBC, basically broadcasters. In their presentation, although they recognized copyright, they said that the fact that there were exceptions undermined this right, that the effect of it would be to expropriate that right. I think they even used that expression. However, that remains to be seen.

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Therefore, broadcasters said that copyright should be protected. They even went so far as to suggest in their presentation that the government should establish a collective society to which all producers of this type of product would be required to belong.

I ask them if they had proposed that to the Department of Industry or to the Department of Canadian Heritage, and they said that they had, but that they had been given no reason why the proposal was rejected. Therefore, I would ask you the following question: Have you had the opportunity to discuss this notion and, if so, why was it not accepted?

Ms Danielle Bouvet (Director, Intellectual Property, Department of Industry): I can confirm that representations were made to both departments, asking them to give serious consideration to the idea of imposing collective representation to one single collective society for the management of audio visual works.

Why was that approach not taken? I think that there are two reasons that can be given here.

First, imposing the creation of a single collective society would represent, for us, a precedent which we were not ready to establish. Under the present Copyright Act and even in the proposals before you, we always deemed it appropriate to leave it to the authors themselves to decide whether they should create one, two or three collective societies for the management of their works.

We believe that imposing the exercise of copyright through a single collective society would establish a precedent which we might consider inappropriate. We believe that to date, the exercise of rights through a collective decided upon by the authors themselves is an approach which has its benefits.

If we had established one single society to manage all works, we would have failed to maintain certain commitments made regarding exceptions. If you create one single collective for the administration of audio visual works, that means that schools would be paying for the use of educational material. That was in contradiction with the promises made by the government to create, in certain respects, clear exceptions for the use of educational material. Therefore, for these reasons, the government did not accept that proposal at the time.

[English]

Mr. Bélanger: We certainly have heard a lot of arguments in favour of collective agencies or collective societies; that this situation has evolved quite nicely over the last few years in the country; that left alone, it might continue to evolve very nicely; and that by bringing in some additional exceptions to copyright in Bill C-32, the government is intervening in that evolution, if you will.

The question here is one that has not been brought up before. I want to know if at any time the drafters of the bill considered sunsetting some exceptions so as to perhaps encourage continuation of collective societies reaching agreements with users.

Was that concept ever looked at?

Mr. Rabinovitch: The concept of the review in five years is one we have discussed amongst ourselves a number of times. We consider this to be a very practical way of looking at the provisions of the bill once the bill, in whatever form, becomes law.

I would not consider that to be sunset, because sunset implies that something actually ends, or stops to apply. But to have an active review is a step towards...or a type of useful review.

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Mr. Bélanger: Fair enough.

Are there valid, specific reasons why in the bill we're not granting to photographers the same kind of copyright of life plus 50? If there are, I'd like to know what they are. If not, that may be an amendment the committee may want to consider.

Mr. Jeff Richstone (Counsel, Legal Services, Administration and Systems, Department of Canadian Heritage): There are provisions in the bill that deal with the ownership of photographic works. That has not changed. The initial ownership of the plate is vested in the person who owns the plate. We haven't changed that.

The question of the duration of term is certainly an option open to us under the Berne convention, but at the time of review and of implementation of the NAFTA agreement and the TRIPS agreement the government looked at those provisions and they weren't compatible with the Berne convention. The government left it at that. To reopen that question would have meant reopening the general question in a much broader way, and that was not deemed to be considered.

I don't if I....

Mr. Bélanger: No, you didn't.

Mr. Richstone: I'm sorry.

Mr. Bélanger: The photographers have asked why they are treated differently. They say we're granting copyright of a certain duration on all works except, it seems, photography, photos, the one who takes the photo. They've asked to be treated the same. I'm asking whether there are any reasons -

Mr. Richstone: Of duration.

Mr. Bélanger: - why we don't give them the same duration.

Mr. David Tobin (Acting Assistant Deputy Minister, Industry and Science Policy, Department of Industry): Who owns it?

Mr. Bélanger: Yes, who owns it? I mean, once they've sold it, we understand the ownership of copyright is transferred. They've given us some examples of photographers making a photo, the photo being used in a book, and the copyright of the book lasting longer than the copyright of the photo. Why? Is there a reason? If there's none, then maybe we should give them the same duration.

[Translation]

Ms Bouvet: I think I can offer a reason that I hope will be adequate.

When the Act was passed in 1924, photography did not enjoy the same status it does today. At the time, taking a photograph was not seen as showing as much originality and creativity as it does today. The profession has evolved a great deal since that time.

At the time, the reason given to justify a limited protection is less valid today than it was then, because everyone recognizes that the photographer gives the work a peculiarity that allows it to be considered in the same way as any other work that enjoys protection under the Copyright Act.

I can tell you that there are discussions underway...

Mr. Bélanger: If I understand correctly, we might expect an amendment in this regard.

Thank you, Mr. Chairman.

Some hon. members: Oh, oh!

The Chairman: Do you have any other questions, Mr. Leroux?

Mr. Leroux: In our earlier discussions on copyright, the fundamental issue raised was whether, in cases where there is a licence, exceptions must be made under the licence. The bill does not contain any recognition that collectives exist. Where there is no recognition, exceptions must be granted under the licence, and not in the bill.

I would like some clarifications about neighbouring rights, and here my question is toMs Bouvet or Mr. Tobin. I would particularly like to know about this with respect to the Copyright Board and the framework provided in the definitions.

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Some technical amendments have been tabled and we have to agree that some of them are important. This subject has been a major concern for all the groups which have testified before us. It is important that we understand each other properly in the context of our future work.

As regards the Copyright Board, I would like to ask some questions about the enforcement of certain clauses of the bill. I would like to know what you mean when you say that the Board must take into account the fact that tariffs apply only to that part of the total programming of a user that consists of sound performances and recordings. Although some users benefit from the fact that the music is being broadcast, they are in favour of selling sound recordings, and any other factor may be taken into account as well.

I do not understand. I don't seem to grasp issues involved in the powers you would give the Board.

What do the following words mean: ``must take the North American market into account''? I cannot understand this bag of sand you are placing on their backs. That is going to put them under.

Mr. Bélanger: They will drown with a bag of sand.

Mr. Leroux: I don't understand the implications of that. Why, all of the sudden, are you making the Board...

Ms Bouvet: First of all, Mr. Leroux, I am wondering why you are asking me this question.

Mr. Leroux: I'm asking it to you, to Mr. Tobin and to Mr. Rabinovitch. Apparently everyone wants you to answer it.

Ms Bouvet: I felt a little on the spot.

Mr. Leroux: It doesn't matter, it could just as well be Ms Katz or Mr. Bouchard.

Ms Bouvet: I start by speaking about the general way in which the bill has been framed so as to give new criteria to the Copyright Board in light of the new rights that have been introduced.

The provisions are more explicit than they were in the past, because, in the current Act, there are criteria about the retransmission systems only, in which the Copyright Board is asked to take certain factors into account. The fact that these criteria were put into the legislation has proven very useful. Once the criteria were established, it was seen that, from the government's point of view, the Copyright Board had given them adequate consideration.

Lastly, with respect with the two regimes set up, namely neighbouring rights and home taping, we decided that we would provide a framework because we felt it reflected a certain political reality, that is the need to ensure balance between broadcasters and creators. We know that this approach has been very controversial. You yourselves have witnessed how fiercely disputed the matter is.

In the government's opinion, these were the main criteria to be considered by the Copyright Board.

More specifically, concerning the need to ensure that the use to which the work is put is reflected in the tariff, this was taken from the previous decisions of the Copyright Board. We know that the SOCAN tariff, for example, already recognized the fact that a reduced tariff is paid in the case of radio stations with less than 20% music broadcasts. This criterion, among others, reflects the principle that payments are to be based on the actual use of musical works, among others.

Mr. Leroux: But all this is the result of your impression that the Board was unable to do so. With the tools at its disposal now, has it shown that it is able to play this role? It seems to me that it is really putting the Board in a straightjacket.

.1200

I'd like to know whether the Board was involved when you went about drafting this bill? I am putting the question to you. I forgot to ask you before. Did they work with you and give you the benefit of their expertise and their comments or were you made aware of their point of view solely as a result of the brief they tabled in this committee?

The Chairman: If I understand correctly, Mr. Leroux, you're asking two questions. There is the first...

Mr. Leroux: Yes, but I wanted to come back to the point I raised at the beginning. Were you made aware of the Board's position solely as a result of their brief tabled in the committee or did you work together?

[English]

Mr. Tobin: On the first part of your question, going back to the notion of the criteria, asMrs. Bouvet said with respect to the whole concept of an introduction of neighbouring rights, it was such that the two parties - whom you've heard here before you on several occasions - were concerned about the nature and impact of these rights, that the government felt it best to put some sort of general criteria in the legislation that the board would have to at least take into account in its deliberations, ensuring all the while, of course, that the deliberations were those of the Copyright Board and not of the government.

I think it was a question that - because these were new rights, introduced long after the whole concept of copyright was introduced - the government just wanted to be in a position in which there was some sort of clarity assigned to the deliberations of the board, but again underline that it was the deliberations of the board with respect to how the tariffs will actually be set for the new rights.

As to issues of dealing with the board, policy matters are of course policy matters within the purview of the government and bodies like this in terms of decisions that are eventually taken. Discussions with the board are generally of a technical nature when you're looking at pieces of legislation. I'm not sure if Victor or my colleagues want to add anything to that.

Mr. Rabinovitch: I think that's a very clear description, Mr. Chairman. We would only discuss with the board on a matter of understanding and operational or technical consideration, not in a matter of trying to devise policy jointly or in some way influencing how the board's deliberations operate.

[Translation]

Mr. Leroux: I'd like to come back to the question relating to the regimes. With respect to the retransmission regime, as SOCAN, etc., the collectives are to be found in the retransmission regime. Why have they not preferred the SOCAN regime or the arbitrage regime? It seems to me that the retransmission process is more costly than arbitration. Why was it included in this regime?

Ms Bouvet: A significant feature of the retransmission regime is that if authors don't come under the umbrella of a collective, they are unable to exercise their rights. This is an important distinction in relation to the SOCAN regime where it is always possible for an author to be paid in an individual capacity and thus to claim or to negotiate the amount he wishes.

When one comes under the retransmission regime, not only is it necessary to come under the umbrella of a collective society but rights holders are unable to exercise their rights in any other way. They have no choice but to become members of a collective and to table a tariff if they want to be paid.

[English]

The Chairman: Mr. Abbott.

Mr. Abbott: Thank you. We've had witnesses who have suggested that due to lack of consultation with them there are many things that are missing or that should have been added or even deleted from the legislation. I must tell you I was a little surprised when I received the volume of technical amendments. What should I take from the volume of technical amendments? Should we not expect that the legislation should have been able to be tabled as is, or in other words, it should have been able to get away without that volume?

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Mr. Rabinovitch: Mr. Chairman, the legislation has been under development, or under discussion, let's say, for approximately eight years. It has been under active development, including active drafting, for a period of at least two years. There have been many, many opportunities and much, much time for different groups to come forward, whether informally or formally, and to express their views on what should be involved in copyright phase two. Indeed, when copyright phase one was introduced over eight years ago by a former government, it announced at that time that there would be copyright phase two. So the broad public, the interested public, has known about this and has had so many opportunities to come forward and express views about it.

The legislation itself is complex and technically difficult. You and the members of your committee know that, Mr. Chairman, as well as anybody in this country. Complex legislation of a type that is dealt with by our departments frequently has many amendments brought forward at the committee stage. We were just discussing yesterday how, when the most recent Broadcasting Act was being discussed, the number of amendments brought forward at that time and adopted at that time at the committee stage I believe numbered over 200.

We're caught here. It's an interesting paradox. On the one hand, our minister Ms Copps came forward at the introduction of this legislation and said that there would be an open and full discussion at the standing committee stage in order to provide for a wide canvassing of opinion and a wide canvassing of technical expertise from groups and individuals across the country. On the other hand, if one looks at what is being suggested and proposed and takes it very seriously, then one may be accused of having not prepared adequately.

As I say, it's a paradox: either one has a committee session where at the end of the day there are absolutely no corrections to be brought forward, or one has committee sessions where one listens carefully and really does try to use the opportunity to improve, to learn from others, to remedy errors at the drafting stage, and also to recognize that in five years' time other errors would have been identified.

I hope, sir, that this explains to you very genuinely our view as officials. We believe this has been consulted extensively, and we know the work that has gone into it. We know the individuals who have been involved with it in various stages, and we do believe we have learned a lot from these committee hearings.

Mr. Abbott: Perhaps you and I have a difference of opinion between technical amendments and substantive amendments, but we'll leave that as it is.

Do you think the legislation would be improved if we were to include something that would specify - whether it's a collective like CANCOPY or it's a copyright board - that there be one uniform tariff? We received testimony about the fact that CANCOPY established two different levels of tariff for copying exactly the same material, depending on whether it was profit or non-profit. Would the legislation be improved by specifying that there be only one level of tariff?

[Translation]

Mr. Bouchard: It's probably up to each of the parties to agree on the tariff to be established.

In the case of CANCOPY, the approach which it takes in relation to a non-profit or profit business is its own choice. The people doing business with CANCOPY may eventually sign these agreements. They can always disagree on the position of CANCOPY, in which case negotiations are necessary. If there is a disagreement, it can be submitted to arbitration, that is to the Copyright Board.

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[English]

Mr. Abbott: We have a situation with university copying where there are more and more private, for-profit organizations becoming involved hand in glove with the non-profit university. We then have a private, for-profit organization making copies on the university premise, and we have another one making exactly the same copies for exactly the same students of exactly the same work just down the street. It just doesn't seem right that there should be two different levels.

Again, I'll pose the same question: would the legislation not be improved by the addition of the provision that whatever the tariff is, it be applicable across the board?

Mr. Rabinovitch: First, Mr. Chairman, certainly we'll think about this some more. As I've said a number of times, eventually we will have advice for our ministers, and they will make decisions. So please just take that as a sign that we will think about this question.

At this moment our own reaction, as I'm discussing with colleagues to my left - Industry Canada is always to the left of Heritage - and to my right is that the concept of collectives negotiating the tariffs is one we don't wish to undermine. By setting out specific direction that there should be a uniform price - as I've said, this is simply speculating together here - it would in fact involve the government, or Parliament, more broadly, inserting itself into what is supposed to be a negotiation process and a market process.

For example, one anticipated outcome of requiring a uniform price might well be that the price charged by non-profit institutions would then go up rather than the price charged by profit institutions going down.

Mr. Abbott: Okay.

Finally, there is qualification for neighbouring rights. We got into some really interesting discussion about this, and I'm reflecting back now to our meeting last June, where I was posing the idea that perhaps an American artist might come to Calgary from Denver and thereby avail themselves of the neighbouring rights from Canada, as well as the other Rome Convention countries. I posed that to us in June and I don't think we really came to any conclusion.

We also were talking with someone, I believe from the recording industry, in testimony, where it seemed as though it was completely unclear who would qualify. For example, would a Canadian citizen who perhaps resided out of Canada, even recorded out of Canada, by virtue of their Canadian citizenship qualify, etc.?

My question is, again: in the legislation, is there sufficient clarity to determine who would qualify for neighbouring rights, assuming that the decision is to go ahead with neighbouring rights?

Ms Katz: What the question refers to, as I understand it, Mr. Chairman, is the criteria of attachment. What makes a sound recording eligible for Canada's performing rights regime?

There has been, I think, in testimony that you've heard, some discussion as to whether or not the criteria were indeed clear enough, and whether or not the criteria might permit a simple contractual arrangement - a signing of a contract in Canada - yet with the actual fixation happening outside of Canada. The question that arose was, could a simply administrative or contractual arrangement happening inside Canada's borders qualify a recording for Canada's regime, notwithstanding the fact that the fixation actually happened elsewhere?

I think we would want to look at that language and ensure that indeed the intent is reflected in the bill more precisely that the fixation occur in Canada - not that a simple contractual arrangement be arrived at inside Canada but that the fixation occur in Canada. I know you have heard testimony indicating that perhaps the language is not clear enough, and on consideration of that we would certainly want to ensure that the language is clear.

.1215

In response to your second question, the Canadian citizen outside of Canada fixing a recording outside of Canada - no, that sound recording would not qualify.

Mr. Abbott: What about an American citizen fixing it in Canada?

Ms Katz: If it is fixed in Canada, yes.

The Chairman: Mr. O'Brien.

Mr. O'Brien (London - Middlesex): Thank you, Mr. Chairman. I wanted to be sure I understood Ms Katz, earlier.

I thought you said that the issue of ephemeral rights and transfer of format and all that was not a topic of discussion until very recently. Is that correct?

Ms Katz: Mr. Chairman, I should clarify my earlier comments. Thank you for the question. The question of ephemeral recordings, and whether or not it would be appropriate to introduce an ephemeral recording exception, is an issue that has been on the table for some time.

At the end of the day, the government's approach to exceptions in the bill was that they would be limited to public institutions - exceptions that would serve the public interests rather than a private or commercial interest. That is the distinction the bill makes as to what exceptions would be appropriate and those that would not.

With regard to transfer of medium, however, that is an issue that came to us very late in the game.

Mr. O'Brien: Thank you for that clarification; I appreciate it. We've certainly had a lot of input from both sides of the issue, as you know, on this whole issue of ephemeral rights and transfer of medium. I know MPs and all parties right across Canada are having lots of input.

I don't mind saying that personally I have some sympathy for the people in the media with some of the issues they raise with me. Earlier I questioned witnesses about the idea, or the hope, at least, that there was going to be a settlement. There's all this talk going on, that a settlement is hopefully going to happen.

We're at the very last day now, Mr. Chairman, and I guess my question is, do you have any news that a settlement is going to be signed today, or does the committee have to come to grips with this issue because a settlement isn't going to happen?

Mr. Rabinovitch: Mr. Chairman, if I gave news now, but the news was not released for an hour from how, that would be a time shift, and I would certainly -

Some hon members: Oh, oh!

Mr. O'Brien: It wouldn't bother you, would it?

Mr. Rabinovitch: I'm told by Mrs. Katz that I would have to sing it; if I sang, it would be fine. Here there would have to be listeners' rights, not performers' rights.

Mr. Chairman, we have also had the opportunity of listening to the representatives of broadcasters on this issue, and we have met with them a number of times. We have also heard from representatives of the creators, who are not as enamoured as the representatives of broadcasters of some wide-ranging ephemeral exception.

We don't have news to announce at this time. What we can say is that as officials we are listening, we are looking at and examining. We are not doing it from one point of view only. At some point clearly we will be seeking political direction on this. I don't think I would go much further than that.

But certainly we're aware of the arguments that are made for the needs for time-shifting, particularly in a country with four and a half time zones, and other very eloquent lines about Santa Claus parades and things like that.

We're certainly also aware of equally eloquent arguments from creators who fear that introducing at this stage a new exception could in fact be misconstrued into opening a gateway to the whittling away of what was intended to be a genuine protection of a creator's right.

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Mr. O'Brien: Thank you.

I guess for the record, I raise this point...and I'm not sure if you've had a chance - probably you haven't - to to look at all the testimony of all the witnesses. I asked I think Mr. Basskin this question, because he was saying, look, there's no intention for creators to go after the broadcasters, etc. That's good news. Then you wonder why they can't get a settlement there. If they don't, I guess the committee will have to deal with the issue.

I was hopeful - and maybe I was naive - they were actually going to settle this thing before we got into it clause by clause, but if they haven't, they haven't.

My last question is for Ms Bouvet. Again, it's a clarification - unless I misheard what was said.

Did you indicate that past governments have made commitments to educational institutions that they will be having exceptions to allow them to carry out their duties? Or did I mishear your earlier comment?

Ms Bouvet: With respect to exceptions, in general government had made promises since 1988 to introduce exceptions. I remember during the passage of Bill C-60 in 1988, Flora MacDonald, then communications minister, made a statement before the Senate saying there would be exceptions in the coming months in the Copyright Act. The government has been working on that basis since then.

Mr. O'Brien: Perhaps I can just pursue that. Was the comment just general in nature? How specific were various ministers or officials about the nature of those exceptions?

Ms Bouvet: I think in her statement at that time she referred to some specific examples of exceptions she was contemplating at that time. Many discussions have occurred since then. On the basis of those discussions the government took the position that exceptions like the one proposed at that time should be part of phase two.

Mr. O'Brien: Okay. Thank you very much.

Mr. Rabinovitch: To add to that, after speaking with my colleagues here I'm reminded that the current government, on a number of occasions through various ministers, has also spoken generally about exceptions being part of a copyright regime. Obviously what we worked on, and then what the government tabled, reflected what this government has been thinking about exceptions, broadly understood, for non-profit public institutions.

Perhaps I can add one last point about the need for an ephemeral exception. The comments or the position expressed by Mr. Basskin as one representative, as well as comments that have been made by representatives of one of the collectives operating in Quebec, have been as eloquent as comments from representatives of broadcasters. Clearly, in looking at the issue of an ephemeral exception, the same issues of need, of balance, of fairness and of definition would have to come into play.

So it's no easy matter. It's not an ephemeral matter.

Mr. O'Brien: No, that's right.

Since I raised this, Mr. Chairman, I'd like to make it clear that I agree. There has been a lot of eloquence from lots of witnesses at this committee. But on that issue, the reason I raise it is that eloquence hasn't led to a resolution of the issue. I thought maybe it would, and I think it's unfortunate it didn't.

So whether we're eloquent or not, we're now back to the elected representatives having to sort through this to make a final decision on it. I guess with your assistance, we'll do it.

.1225

The Chairman: You're being very eloquent about it.

Some hon. members: Oh, oh!

[Translation]

The Chairman: Mr. Leroux.

Mr. Leroux: I have a few questions about neighbouring rights. I'd like to come back to the $1,250,000.

First, concerning the Board and copyright, subclause 68.1(4) says:

(4) The Board shall, in certifying a tariff as approved under subsection 68(3), ensure that there is a preferential royalty rate for small cable transmission systems.

Why not provide for the same thing for neighbouring rights rather than giving the Board a broad scope for interpretation?

Ms Bouvet: Could you repeat your question?

Mr. Leroux: Earlier on, you told me that the government, to guide the Board in its...

Ms Bouvet: It wasn't detailed enough?

Mr. Leroux: There are a lot of things. Concerning copyright, what the Board is being told is rather simple. It says that in certifying a tariff approved as set out in subsection (4), that it will ensure that there's a preferential royalty rate for small non-cable transmission systems. Why not neighbouring rights also?

In 83(9), on page 84, you provide the following framework for the Board:

(9) In exercising its power under paragraph (8)(a), the Board shall satisfy itself that the levies are just and equitable, having regard, among other factors, to (a) the amount of the levies payable under comparable laws of other countries; (b) the nature of the North American sound recording industry; and (c) any prescribed criteria.

What is to be understood by ``the nature of the North American sound recording industry''? How can the Board interpret the nature of this industry? Please explain that.

[English]

Mr. Tobin: From a general point of view - and then I may ask Mr. Bouchard or Ms Bouvet to answer some of the detailed parts of this - I think the nature of why there is some precision, or more precision, with respect to small radio stations in the bill as opposed to, say, retransmission, if I understood the member's question...again, I go back to what I've heard here before. Given the nature of what we are dealing with here, given the nature and discussion surrounding the introduction of a new right, it was felt that for purposes of dealing with at least small radio stations there should be a degree of precision so there is no uncertainty at all as to how smaller stations will be treated.

I think there was general agreement that smaller stations should receive some sort of special treatment. It was felt that at least for the time being, it should be precise in the act as to what that treatment should be as opposed to other rights that have been going on for some time, with a body of practice built up over time with respect to the other rights such that people and the participants are generally comfortable with the regime as it now stands.

In this case, where it was one starting with new rights, it was felt there should be a degree of precision and comfort that perhaps wasn't needed in the other cases that have been going on for some time.

[Translation]

Mr. Leroux: Mr. Tobin, as we are prescribing a review of the legislation within five years, why not experiment with the tools we have, as they're defined now? As there is a provision for review in five years, why not evaluate the legislation now? It's easier to improve a bill than to amend an Act.

It seems to me Parliament could have allowed establishing the rules of the game as was done in the case of authors collective societies over the years.

[English]

Mr. Tobin: You raise an interesting point, and a legitimate one. I suppose it depends on which.... You could have gone the way you suggested, perhaps, saying let's review and see how it works down the road. Again, given the nature of the discussions held over the concept of neighbouring rights - and as people have said before me, they've gone on for some time - the decision was to err, if I can use that term, on the side of precision and deal with the review five years down the road. It's a question of judgement.

[Translation]

Mr. Leroux: Mr. Tobin, it is always difficult for Parliament to delete certain provisions from an Act, especially when people were set on a specific course at the outset.

.1230

There's something here that, in my opinion, seems to be contrary to the way things should be in a legislative process.

The Chairman: Mr. Bouchard, do you want to add anything?

Mr. Bouchard: I think the reverse could be also argued. In giving guidelines to the Board for the first five years, in so far as there is a review at the end of the fifth year, we can see if things have been done in an orderly way and, after that, what criteria could be deleted.

So the contrary of your reasoning concerning imposing immediate criteria can also be argued.

Mr. Leroux: I already put a question on the basic amount of $1.25 million in publicity revenue, but I'd like to hear the answer again. What was used for the calculation? Was it based on your studies? Based on what statistical groupings? It's not a matter of obtaining copyright and doing away with other legislation. We agree on that.

On the other hand, I would like to know where you got this $1.25 million floor for publicity revenue.

Mr. Bouchard: Should we be speaking about $1.3 or $1.2 million? At some point, you have to come up with a figure. The data was collected from Statistics Canada where radio stations are indicated as having whatever revenue or financial viability and so forth.

Radio stations with revenues of $1.25 million are not really big stations. They are stations that are usually situated in small communities, in small centres or in the suburbs of bigger centres.

It turns out that this concerns nearly two thirds of the radio stations, and that was part of the parameters given to the Board with respect to neighbouring rights. This means that approximately 66 or 65 per cent of stations are exempt from payment.

This is based on Statistics Canada data which gives us a fairly accurate portrait of the situation in the radio industry.

Mr. Leroux: Let's say that there are other figures available on the market, other studies, etc. Would you not have preferred to undertake your studies over the next five-year period and to examine market negotiations before deciding to set this amount at $1.25 million, given that, according to the calculations that have been made, 72 per cent of all broadcasting revenue is exempt?

We know that some mechanisms have been put in place, we know that there is a Board and we know that the role of the Board is to assess the payer's situation and to determine whether or not he is able to pay and, if so, on what basis. Why did we not wait and see how this played out rather than try to determine, in advance, something in the order of... If we establish that, we will have a reference point.

It seems to me that this sector is fairly orderly. Some very interesting agreements have been made.

Mr. Bouchard: When this was prepared, we took the financial health of the radio industry into consideration.

The radio industry has gone through quite a tough time over the past few years. Were we to postpone this mechanism for five years, we would have failed to consider the financial hardships experienced by the radio industry over the past few years.

Mr. Bélanger: The purpose of this morning's exercise is to obtain information and to discuss, because we are very close to entering the discussions that we will have to have shortly, when we begin the clause-by-clause study.

Mr. Leroux: Mr. Bélanger, I wanted greater clarification about this approach which makes use of exceptions as opposed to one whereby we recognize a negotiation process that establishes the rules of the game.

This is what I really wanted to clarify with these people. They're telling me that they use exceptions because they want reference points. They conducted a study instead of the real actors, who have their own studies and who are able to talk and negotiate with each other.

This is what I'm trying to establish. The government said that it was going to be responsible for establishing reference points, because this is all new for actors and they may not know how to talk to each other about this. This is what I was trying to understand.

Mr. Bélanger: This should be clear.

Mr. Leroux: The statistics are there. You established this amount of $1.25 million on the basis of statistics. However, you knew that this excluded 72 per cent of broadcasting revenue. You were aware of that.

Mr. Bouchard: Yes, the data indicates that a certain proportion of radio station revenue is...

Mr. Leroux: Sixty-six per cent of the radio stations and 72 per cent of the revenue.

Mr. Bouchard: As far as the 72 per cent of revenue is concerned, that depends on what time you are talking about. This may be the introductory phase or the fifth year. I will have to check the figure.

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We were not exempting a proportion of the revenue, we were exempting the proportion of radio stations with fairly low revenue. This is how we proceeded.

Mr. Leroux: So why does this $1.25 million amount apply to big centres as well?

[English]

Mr. Rabinovitch: As was just pointed out, there's only so far we can go as officials in looking at technical issues where they begin to merge into political decisions, really. Let's still try to remind ourselves as to what it was that has been done in the bill with regard to the neighbouring rights regime, or the performers and producers regime.

It is a new concept for Canada. It is a new type of right for Canada. It was debated publicly at very great length. There were very strong feelings and very emotional feelings being expressed by a multiplicity of parties.

In the end, given these divisions, as officials we were faced with essentially two choices. One choice would be to say that as officials, we can't find any solution. The other choice, as officials, is to say to the political masters of the day that perhaps they could find a compromise. Compromises always involve judgment, a judgment as to what is the right number. Should it be $1,250,000? Should it be $1 million? Should it be $750,000? It's a judgment call.

But the judgment call - and I want to stress this - that was made here was informed by good, sound, statistical knowledge. Therefore, when the decisions were made, people did know the impact of those decisions.

Again, only those who are elected can really bring their judgment to bear.

[Translation]

Mr. Leroux: I understand better now. Through your technical amendments, you have made certain corrections, which include inserting the words ``performer'' where it wasn't before, namely, in the clauses dealing with the new collective society. You have corrected this. Why did you not define performer in the bill? This is perhaps in line with Mr. Abbott's question: Is he a resident, is he Canadian?

Mr. Richstone: Mr. Leroux, we chose to define the performer's performance instead of the performer himself. As you can see, the bill or the Act protects the work, the object of copyright. Consequently, this deals with the object of the copyright and not with the person who creates it. The legislators or the drafters could not decide to define the individual or the performance. The government opted for the performance.

Mr. Leroux, the author is not defined. Consequently, we decided to define the performance instead of the person.

If you were to take a look at some of the suggestions made by certain witnesses to this committee, you would see that they use the definition of ``performer'' taken from the Convention of Rome. The committee could decide whether the definition contained in the Convention of Rome should be more precise than that contained in this bill. It may very well be that the definition of this bill is clearer and more detailed than that given in the Convention of Rome.

[English]

The Chairman: Mr. Abbott.

Mr. Abbott: In terms of how you arrived in the legislation at the criminal threshold - in other words, where we have legislation that offers both civil remedy as well as the criminal side - do you feel comfortable that it is at the proper level, and can you advise us what was taken into account to arrive at the criminal threshold?

Am I clear in my question? I guess what I'm asking is how a judgment would be made as to whether to proceed with criminal prosecution.

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Mr. Richstone: Mr. Abbott, as you know, the threshold right now in the act that you see in section 42 was part of the phase one package. That particular amendment was made at that time and occasioned a great deal of discussion.

Right now, as you know, the matter as to where to proceed, either through summary conviction or through indictment, is a matter of prosecutorial discretion. Generally that is the case. I can't imagine any Criminal Code offence or any offence over which the Attorney General, either of Canada or of any of the provinces, has.... There is always a question of prosecutorial discretion as to how to proceed. In the Criminal Code offences of theft, it's the same issue.

On the particular question of criminal remedies in the Copyright Act, I am informed that right now the Department of Justice and the RCMP are working out a set of guidelines to better identify for prosecutors across the country the kinds of issues and factors that should be taken into account as to whether to proceed summarily or by indictment in a given case.

In the realm of copyright, in terms of the criminal remedies you have here for the offences, it is often difficult to quantify those issues. To have an arbitrary, set threshold would be very difficult, and in certain cases either impossible or irrelevant in the particular case of the criminal offence concerned. But generally a set of guidelines will be worked out, I am informed, so the prosecutors will be better informed on how to proceed.

Mr. Abbott: Finally, on the issue I raised in June last year, I wonder if you could point the committee to the specific provisions in the proposed legislation that will exclude Canada from the probability, in my judgment, of U.S. encroachment on the revenue from neighbouring rights.

Can you help us understand, in specific terms, why we are not going to see 70% of the radio broadcasters' revenue, if indeed most of their play is of U.S. artists? What specifically in this legislation will close the door to the U.S., under NAFTA, or prevent the WTO, under any other provision, from going after us?

[Translation]

Mr. Bouchard: I would say that the attachment criteria are used for the neighbouring rights regime. It is the producer's nationality and, as Susan pointed out earlier, it's also the place where the fixation was made. If an American artist has the fixation of his sound recording done in Canada, he is eligible at that point. This was part of the intent.

[English]

Mr. Abbott: I understand that's the intention, but my concern is that even the provision you have just described could very well come under....

We've seen what the U.S. has done with regard to softwood lumber and durum wheat, for example. Why not neighbouring rights? Why would the U.S., no matter what we do...?

I appreciate your answer relative to the definition. As I understood it, we received assurances from the presentation made by your board in June that there wasn't going to be any concern about the possibility of the funds bleeding off to the U.S. artists because they are played 70% on English Canadian radio.

What I'm asking is what makes you so confident, and can you point to something in this bill that would give us comfort that there is no way the U.S. could be successful in coming after us?

[Translation]

Mr. Bouchard: Indeed, the entire bill complies with our international obligations. It is compatible with our international obligations, including the North American Free Trade Agreement. Because of the way the bill is structured and because of the way the neighbouring rights regime is structured, we are confident that part of the repertoire will be eligible and the works that you mentioned, namely American works that have been fixed in the United States will not be eligible under this regime.

Consequently, the economic spin-offs of the regime will be primarily for Canadians and the other producers or performers in countries that recognize the same type of regime in their country.

[English]

Mr. Abbott: I'm trying not to be argumentative - I really am - but my difficulty is if -

The Chairman: You're trying to, but you're not succeeding.

Some hon. members: Oh, oh!

.1245

Mr. Abbott: Okay, thank you.

If the neighbouring rights tariff is applied to all advertising revenue of the radio station and in fact 70% of the air play of music is U.S., I find it difficult to believe that the U.S. would not say....

In other words, why are you not just taking 30%? Do you understand what I'm saying? I just can't imagine that they aren't going to come after us. I predict they're going to come after us; let's put it that way.

The Chairman: Shouldn't we leave it at Mr. Abbott's prediction and hope he's wrong?

Mr. Abbott: I predict a Reform government too.

Some hon. members: Oh, oh!

The Chairman: Then he's definitely going to be wrong.

Mr. Rabinovitch.

Mr. Rabinovitch: Mr. Chairman, I'm mindful of your subtle warning.

Clearly a sovereign country can choose, in its own sovereignty, to initiate some trade action or another, and the foolishness of its trade action would eventually have to be demonstrated at whatever panel might be established. Of course I would not refer to any particular country other than ours. It would be ill-advised to initiate such a trade action.

We've been very careful, in the preparation of the bill, to look at all our international obligations, both bilateral and multilateral. We have been very careful, in devising the neighbouring rights regime, to be consistent with our obligations under the Rome Convention, which is the applicable international convention.

All I can do, as I'm sure your own private lawyer would do, is assure you that we believe everything we have put forward here through ministers is absolutely consistent with our obligations. If somebody from another country is foolish enough to try to bring a case, we will be able to defend it. We will do our damnedest to defend not only Canadian sovereignty but the rights of Canadian broadcasters and creators, and to do that which the bill is intended to do.

Some hon. members: Hear, hear!

[Translation]

Mr. Leroux: Is that the political statement of the deputy minister?

Some hon. members: Oh, oh!

Mr. Leroux: He is financed by the BIC.

The Chairman: Mr. Bélanger.

Mr. Bélanger: I would have liked to ask other questions, particularly concerning clause 90 and the issue of whether or not we should allow individuals who are entitled to purchase books, even if there is an exclusivity agreement... But since my time has already been given to the Opposition parties, I will refrain from asking questions.

However, we still have 10 minutes, I believe, and if the committee is in agreement, we could perhaps discuss the days and weeks that lie ahead and determine how we will proceed. For example, when do you foresee beginning the clause-by-clause study of the bill?

The Chairman: Mr. Bélanger, the committee members agreed to hold a half-hour meeting, from 1:00 to 1:30 p.m., so that we can discuss these questions amongst ourselves.

Mr. Bélanger: Did the members of the committee agree to this?

The Chairman: The members of the committee were in complete agreement with this, yes.

Mr. Bélanger: Very well! I'm no longer a member of the committee.

Some hon. members: Oh, oh!

Mr. Bélanger: I have lost my status as a member of the committee.

The Chairman: I apologize, I will be more specific.

We had talked about a working session, however the clerk found this half-hour, because we had to finish by 1:30 at any rate.

Mr. Bélanger: You're talking about an in-camera session at 1:00 o'clock, but I do not think that we should be discussing the way we intend to proceed while in-camera. I do not see why we should hold this type of discussion in-camera.

The Chairman: I don't understand what you're saying.

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Mr. Bélanger: You said that the committee members agreed on going in-camera at 1:00 p.m. I'm wondering why we need to go in-camera to discuss how we will be proceeding in the future. I do not see the purpose of that.

The Chairman: That's another question. We will decide on that at 1:00. Until then, the committee members can put questions. If you would like to put questions to the Department's officials, Mr. Bélanger, you still have ten minutes. Feel free to do so.

Mr. Bélanger: I will put one.

I would like to return your favour, Mr. Leroux, because you gave me some of your time.

My question is on section 90, which has been at the heart of our debate. I think that most of the groups who appeared before us asked us to amend that section, remove it completely, or remove a part of it. Can we expect, during the deliberations, an outcome that would see section 90 amended?

Mr. Rabinovitch: I would like to give you a general answer. I cannot tell you what the ministers will decide to do. At the beginning of this morning's session, I clearly stated that we will not attempt to reduce royalties nor the principle of royalties. That is a very important principle, if it becomes necessary to change the bill. I cannot, however, answer you at this time.

Mr. Bélanger: For example, could the 11 English words and 12 French words proposed by SOCAN be considered?

Mr. Rabinovitch: [Inaudible - Editor]

Mr. Bélanger: Be careful! Be very careful! We could be getting onto a slippery slope.

Could we hope that the various departments would respond to SOCAN's specific proposal?

[English]

Mr. Rabinovitch: Maybe I wasn't sufficiently clear in French. It isn't fair to ask us to give a specific response in that way. Let us provide advice to our respective ministers in due course. They will tell us how to act.

Mr. Bélanger: Fair enough.

[Translation]

Thank you, Mr. Chairman.

The Chairman: Mr. Leroux, you had questions?

Mr. Leroux: I will attempt to be very clear in French, Mr. Rabinovitch. I understood your answer very well.

I would like to talk about section 20 and to compare it with section 68. Mr. Abbott raised the issue of relations between signatory countries. I would like to point out that under section 22, you mention that where the Minister is of the opinion that a country other than a Rome Convention country does not grant rights to remuneration equivalent to the scope or length of time of the rights set out under section 19 for the public performance of or communication to the public of a sound recording whose producer, at the date of the first fixation, is a Canadian citizen or a permanent resident of Canada within the meaning of the Immigration Act, or a corporation, whose headquarters are in Canada, he can, by a statement published in the Canada Gazette, restrict the scope and time of the protection that will be granted in the cases of sound recordings whose first fixation had been carried out.

Therefore, what we're saying to some people is that if they do not meet our conditions, we can decide whether or not we will give them the same rights.

Under section 68, a ceiling of $1.25 million is set, 72 per cent of radio stations' income is excluded, and neighbouring rights will be collected on the Canadian portion. Could other countries use the same approach with us - while we restrict ourselves in the payment of neighbouring rights - that is, that they will use the same measures because of all the restrictions in Canada regarding the recognition of neighbouring rights? Do you feel that this will have an impact? We are working against ourselves in doing this.

Mr. Bouchard: It is rather difficult to answer that question because it appears to be hypothetical. We do not know what the value of the neighbouring rights system will be. The Board will decide that. Consequently, it is too soon to know what the reaction of other countries will be regarding the system that we will be applying here in Canada.

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Mr. Leroux: But, Mr. Bouchard, speak to the principle, to the drafting of the bill, regardless of value. The bill says that if we are not satisfied with the conditions under which it is being applied, we can review our neighbouring rights under our conditions. But we are giving ourselves some very strict conditions. The ceiling will be $1.25 million and 72% of the revenues is being excluded. So we have set out a framework.

As lawmakers, we could say that if we are not satisfied with some countries, then we can review our position. Are we not shooting ourselves in the foot in giving ourselves such a big yoke? That is quite possible.

Mr. Bouchard: Under the bill, a decision will be made once it has been determined whether or not external systems provide the same type of benefits that the system being proposed here does. I presume that the decision would also apply in the reverse situation; that is, that they would also conduct that type of analysis.

Mr. Leroux: In that case, I would invite you to recommend to the Minister to reduce the ceiling as quickly as possible so that we will cease to be penalized, because that can work against us.

Mr. Rabinovitch: It can be interesting to discuss hypothetical issues, but the fact is that Canada is a Rome Convention signatory country and will make other Convention partners happy with this bill. Those countries will feel that it is a step forward towards the creation of a larger community. They will probable hope that some other countries, even countries that are much bigger than Canada, will decide themselves to join the Rome Convention.

Mr. Leroux: You agree, Mr. Rabinovitch, that does not change the fact that we are setting conditions for ourselves and projecting conditions for others. This is not simply speculation. We are including our own operating mechanisms in the bill. You admit that.

In any case, after the congratulations and the handshakes at the signing of the Convention, we will then be undertaking the practical part. That means that everyone will sit down, read our plans and consider the consequences that they might have.

Mr. Rabinovitch: It is normal that each country that adheres to a convention consider what the other countries are doing. That is a part of their being sovereign. We hope that they will fully understand the Canadian government's considerations. Once again, that is up to the judgment of the committee members. It is up to the committee to make the decisions.

The Chairman: We will end this part of our work. We must meet in a few minutes to consider other issues.

[English]

Mr. Rabinovitch and colleagues, I'd like to thank you very sincerely for coming out and facing these questions for a sustained time. I know it's difficult to separate policy from technicalities. Sometimes we have a tendency to mix up the two, and I know it makes it much more difficult from your point of view, because decisions finally are not yours.

We really appreciate all your efforts to give us all the information we were seeking. Thank you very much for coming.

[Translation]

Thank you very much.

[Proceedings continue in-camera]

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